The indicator that forewarns of a looming recession | Ausbiz

Isaac Poole from Oreana Financial Services says the RBA faces a tough task at its April interest rate meeting, having to acknowledge the rapid improvement in the Australian economy without completely abandoning its cautious rhetoric. The bank is expected to hold rates at 0.1% this week but also acknowledge that the economy continues to surprise with its strength. Unemployment hit 4.0% in February months ahead of the RBA’s forecasts, making it harder to justify keeping rates at emergency lows. Data on Monday showed job ads at their highest since 2008, pointing to further gains ahead. The market has long wagered the RBA will have to start hiking as soon as June and has priced in six more moves to 1.75% by year end. Adding to pressure on the RBA, the Federal Reserve looks set to deliver a string of super-sized rate hikes over the months ahead. Isaac discusses the risk-reward from such an outcome, whether the inversion of the 2s-10s curve is signaling a recession, along with whether the Fed will be able to deliver a soft economic landing. (Source: Ausbiz) Click here to watch the interview.

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